Where are the Indian Googles, iPods and Viagras?

Instances of products and services being invented in India for consumers around the world are few, if any. But this perspective is too constraining for an understanding of innovation. As the economist and political scientist Joseph Schumpeter famously pointed out, in its essence, innovation is novelty in how value is created and distributed.

It could entail new products or services, new methods of production, or indeed novel forms of organising industries and firms. There is no reason whatsoever why we should restrict the beneficiaries of innovation to be end consumers, which is what we implicitly do when we ask where the Indian Googles, iPods, and Viagras are.

Taking this broader conceptualisation, we uncovered substantial innovation taking place in India, but of a form that is invisible to consumers around the world. Specifically, four types of innovations originating from India remain invisible to end consumers around the world and have been a decade in the making: Globally segmented innovation led primarily by major multinational corporations that have set up "captive" innovation and R&D centers in India.

GE's John F. Welch Technology Centre and Intel's Indian operations in Bengaluru have already demonstrated that India can be a platform for generating innovation for global markets. These companies have developed global products from their Indian R&D centres, just as the companies have done in their R&D centres in the West. At GE, one in six technologists worldwide is now part of the firm's 4,300-strong research facility in Bengaluru.

Intel also launched its Xeon 7400 series in 2008, the first chip wholly designed and developed out of its Bengaluru centre. Outsourcing innovation to Indian firms where R&D services are provided on contract to support new product development for consumers in the developed world. Many Indian companies offer innovation as a service and that has helped make offshore R&D services an estimated $20 billion market in 2012.

Companies such as Wipro Technologies, HCL Technologies, and Dr. Reddy's Laboratories have convinced major MNCs to outsource parts of their product development and R&D processes, from semiconductors to drug discovery, to India. For example, HCL Technologies was heavily involved in the development of Boeing's 787 Dreamliner, for which HCL designed two mission-critical systems: one to avert airborne collisions and another to enable landings in zero visibility.

According to Ian QR Thomas, president of Boeing India, the company found what it needed in India: "In theory, we could place the work anywhere. We're here because we found a level of sophistication." While this innovative work is delivered in response to somebody else's specifications, it is technically complex, the IP generated may be coowned, and, sometimes, everything but the final branding and distribution takes place in India.

Process innovation through an injection of intelligence by Indian firms. Process innovation is increasingly surfacing in some parts of Indian industry because of a phenomenon we call the injection of intelligence. The availability of low-cost, high-skilled labor in India has led to the assignment of overqualified personnel to relatively routine jobs, which sometimes results in surprisingly effective process innovations, even in what were previously considered mature or low-tech settings.

Ultimately, some of these process innovations become embedded in products marketed to the world. For instance, though 24/7 Customer began as a traditional call centre company, it now develops various analytical tools that enable it to conduct predictive modeling, such that the firm can anticipate what a customer is calling about before the agent even answers the call. This process rests at the heart of a suite of products offered under the iLabs umbrella. Similarly, DenuoSource, in the course of a client engagement for IT services, saw an opportunity to convert a systematic approach to identifying store locations into a product called Location Analyzer.

This "productisation" that originates in process innovations is likely to be an important force for transforming invisible innovations into visible ones. Management innovations such as the global delivery model, which effectively bring global scale and cost efficiencies to previously locally clustered services or processes.

While the model is typically invisible to end consumers (except in the case of call centres), it is also, paradoxically, highly visible to most Western citizens because it is responsible for making the Indian outsourcing industry the success that it is today.